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The Conversation U.S.
US charitable giving dipped to $557B in 2023, but outlook is getting brighter
By Anna Pruitt, Indiana University and Jon Bergdoll, Indiana University,
27 days ago
Donors give more to social service groups, including homeless shelters, than to any other kind of charity besides religious institutions. AP Photo/Morgan Lee
Total giving has swung up and down more sharply than usual in recent years. It first spiked thanks to donors’ responses to the COVID-19 pandemic and the movement for racial justice .
In addition, Americans were not reacting to the unusual events that have shaped philanthropy in the past four years.
As two of the report’s lead researchers , we see more signs of charitable giving’s strength than weakness in this new data. For example, giving from all sources – individuals, foundations, estates and corporations – remained above 2019 levels.
Foundations are playing a bigger role
Grants from foundations receded to $104 billion in 2023 from $106 billion a year earlier. Still, for the second year in a row, nearly $1 out of every $5 going to charities came from a foundation. In contrast, about $1 out of every $20 donated to charities 40 years ago flowed from foundations.
Until the dip in 2023, giving by foundations had grown for 12 consecutive years. An important reason for this consistent growth is the way that foundations give: Most foundations give 5% of their total assets each year, the minimum amount required by law. The rest of their assets remain invested and tend to grow over time. And as foundations’ assets increase in value, the amount they give away increases too.
Giving by foundations will likely continue to grow in the years ahead because large donors, including wealthy philanthropists Bill Gates , Mike Bloomberg and Warren Buffett , have been giving more to their foundations.
In the four years ending in 2023, giving to foundations was higher than at any other time since Giving USA began tracking this data in 1978.
Giving by individuals, by far the largest source of charitable donations, tends to be more responsive to the economic conditions of a particular year than gifts from foundations. It has been more uneven in recent years as a result. Individual giving was fairly flat in 2023, declining by 2.4% to $374 billion from $384 billion a year earlier.
Starting to stabilize in 2023
Churches and other religious causes have historically received the largest share of donations, and that held true in 2023. But religious giving fell 1% to $146 billion in 2023 and has declined in four of the past six years.
However, a different pattern has emerged over the past four years.
Giving to social service organizations spiked as expected in 2020 , as many people sought to support low-income and otherwise vulnerable people by donating to food banks, domestic violence organizations and homeless shelters. That kind of giving then kept rising in 2021.
Giving in this area grew again in 2023 after a slight decline in 2022.
Social services giving has grown so much that it was the second-largest category for charitable giving behind religion for the second consecutive year in 2023. Until 2020, education-related giving, such as donations to colleges and universities, was usually the next largest category after religion.
The latest Giving USA report shows what American philanthropy looks like in a year that was relatively uneventful compared with the ones that came before it – 2023 was the first year since 2017 in which no unusual event or legislation caused major changes to charitable giving.
We will continue to assess these trends to better understand what happens next in American philanthropy.
This article is republished from The Conversation , a nonprofit, independent news organization bringing you facts and analysis to help you make sense of our complex world.
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